‘Decent economic growth’ as NZ manufacturing expands – survey

The manufacturing sector grew in new orders, production and employment despite a slight PMI drop to 55.2.

The manufacturing sector’s turnaround continued into the new year as firms recorded growth in new orders and production, while employment also grew.

The BNZ-Business NZ Performance of Manufacturing Index (PMI) fell 0.9 points in January to 55.2, but was comfortably above its long-running average of 52.5. A score above 50 indicated the sector was expanding.

“The January PMI provides further evidence that the economy has finally turned the corner,” BNZ senior economist Doug Steel said.

“It is consistent with our forecasts and a breadth of indicators suggesting decent economic growth.”

All five sub-indices in the survey showed expansion.

“This was led by the two key indices of production (56.6) and new orders (56.4), followed by deliveries (53.3),” BusinessNZ director of advocacy Catherine Beard said.

“Employment (52.9) recorded its third straight monthly expansion, which had last occurred in the first few months of 2025,” she said.

Steel said the turnaround in employment was “good news”.

“When you’ve got more production and [are] using up spare capacity ... it does mean more jobs, and that’s what we see in the survey on Friday,” he said.

“If you look back at last year, it implies that the net labour shedding that was occurring has drawn to an end.”

But despite the headline PMI index remaining strong, the survey noted the proportion of positive comments fell from 57.1% in December to 47.7%.

It said some manufacturers did report weak demand, while the Christmas and summer holiday shutdowns disrupted production.

- RNZ